Despite Extension, Ag Policy Could See Changes and Cuts

Although Congress extended the farm bill until Sept. 30, the director of the Food and Agricultural Policy Research Institute at the University of Missouri says several factors may cause Congress to revisit the legislation sooner rather than later.

"There’s a very good chance there could be changes in this legislation long before we get to September," Pat Westhoff said. "Not because we’ll necessarily pass a new five-year farm bill right away, but because upcoming negotiations on fiscal issues may cause us to make further cuts in programs to try to meet budgetary targets. That can mean changes in farm bill provisions even for the crop we harvest this fall."

Westhoff says that agricultural programs may be cut as part of three related budget debates that will occur over the next several weeks.

"On March 1, across-the-board cuts in defense and many non-defense programs are scheduled to take effect. Many members of Congress would like to head off at least some of those cuts," Westhoff said. "But they also want to try to find offsetting cuts to pay for not letting those cuts happen. So that may mean there will be proposals to make cuts in farm subsidies and other programs in the next few weeks."

Last year there were some proposals to make cuts to crop insurance. Westhoff says those proposals had very little support in the agriculture committees last year. In fact, both of the bills passed by the House and Senate agriculture committees would actually increase crop insurance programs.

"However, there will be very severe budgetary pressure this year and there have been proposals to reduce the premium subsidy that farmers receive," Westhoff said. "If there are very, very severe budget targets that have to be met, one could imagine those proposals resurfacing and some cuts being made."

Westhoff says many things could happen in the next several months that might affect farm program spending.

"In addition to the across-the-board sequestration, there are also annual appropriation bills that have to be passed in the next couple of months, and there is also the debt limit," he said. Both of those debates could also lead to proposals to cut farm program spending as part of broader efforts to limit government spending.

"I think a lot of people have assumed that we’ve got our farm bill in place for 2013, and it’s true as long as Congress doesn’t pass any new legislation," Westhoff said. "I think it would be a mistake to assume these things are written in stone. Some in Congress may want to come back and at least reexamine if not actually make changes in the bill they approved a month ago."